The government says of the proposal: "As we leave the European Union and therefore the EU Customs Union, the Government seeks a new customs arrangement that facilitates the freest and most frictionless trade possible in goods between the United Kingdom and the EU, and allows the United Kingdom to forge new trade relationships with its partners in Europe and around the world".

"The emphasis on the priority areas identified by the government, including the Common Travel Area, the Good Friday Agreement, North/South cooperation and avoiding a hard border, is welcome", it said in a statement before the UK's position paper was published.

Barnier is the chief negotiator for the European Union in the Brexit talks. The partnership would see Britain impose the exact same requirements as the European Union on goods from outside the bloc destined for member states.

The Brexit department's "Future Customs Arrangements" report says: "Businesses in supply chains would need to be able to track goods or pass the ability to claim a repayment along their supply chain in order to benefit". Once this time expires, the government will hope to establish either a "highly streamlined" border with the European Union or a new "partnership" with no customs border at all.

"But the clock is ticking and what matters now is giving companies the confidence to continue investing as quickly as possible", said Confederation of British Industry deputy director general Josh Hardie.

Outlining proposals for the Ireland-Northern Ireland border  one of the most complex aspects of Brexit  the government said there should be no physical border posts or electronic checks.

The European Union replied to the paper on the same day of its release, saying the issue concerns bilateral relations and can not be addressed before sufficient progress has been made in negotiating the details of Brexit.

Northern Ireland secretary James Brokenshire said he was confident Europe would approve after chief negotiator Michel Barnier called for specific arrangements for a "frictionless border".

London wants to leave the EU's customs union, which would allow it to negotiate its own trade deals with other countries.

"We will be realistic and fair but also stubborn in relation to defending Irish interests", Foreign Minister Simon Coveney told reporters in Dublin on Wednesday.

"The government proposal for a transitional period to help manage any change is something that we have been pressing for but they have also committed to leaving the customs union which is the basis for countries outside accessing the EU market and then negotiating something very similar going forward and we can not take it for granted that others will agree".

The UK will later today make clear that a return to a hard border between Ireland and Northern Ireland would be "completely unacceptable".